Kleptocracies Cash in in Kyopenhagen

So Secretary of State Hillary Clinton has just made news by landing in Copenhagen and immediately announcing $100 billion through 2020 in additional new money to developing countries, in the name of "climate change".

Climate changes. Always has. Always will. And so long as a country remains poor, its climate and weather will be among the greatest challenges to its people. Just like it was to us until we industrialized and got wealthy. All of the billions in foreign development aid have ostensibly been to help these countries deal with climate change (though it is not due to the weather that they remain poor). We know how wealth transfers to kleptocracies works out. We should expect nothing different here. It's just waste and an invitation to fraud on a far grander scale.

For perspective, in 2008, total United States Overseas Development Aid was $26 billion. So you see we're talking about a spectacular increase in foreign development aid in the name of something the case for which is collapsing all around us.

Now comes the cynicism. Clinton's offer carries two caveats. These are first that the money will go only to the poorest developing countries and not to richer ones like China, and second that it is conditioned on richer countries like China making binding and verifiable emission reductions.

So you see the disconnect. Here's a bag of money to incent and assist Party A, but only if Party B agrees to harm itself. I'm pretty sure every law student studies this fact pattern in contracts class.

But there is a loophole in that second caveat such that Party B doesn't really have to self-inflict harm in order to trigger Party A's lucre. Further, bear in mind that Party B -- China, India et al. -- already clean up via the jobs and wealth transferred to them when rich countries undertake Kyoto-style schemes, the continuation of which is also an implicit part of the deal. So it isn't like Party B walk away empty-handed, whatever the perils of the funding model.

This loophole is that China's "reductions" are actually huge emission increases. For example, China's offer of a 45% reduction in emission intensity (emissions per unit of economic output) would, by 2020, produce a 130% increase of what is already the world's largest emissions source. This is being hailed as a massive cut even though it is also less impressive even than business as usual over the last fifteen years of economic maturation, as such improvements are inherent (over that time China reduced its emissions intensity by over 46%).

Better yet, the compromise over how to verify whether China et al actually do what they promise is to allow China et al to tell us in the reports they already files with the UN. I feel better already.

This is a political commitment and Congress must actually appropriate the money. It is just that Obama is putting them in the difficult position of promising they will agree to such a spectacular undertaking. But the key to an actual Kyoto II rising to the level of Senate ratification is some binding promise of U.S. reductions, not just more wealth transfer. And that this is being kicked down the road, but still is on tap, will largely be lost in the fanfare over claiming an agreement not remotely resembling what Obama et al said simply had to be agreed in Copenhagen.

So now it's off to Mexico City next year, when the U.S. would agree to real cuts, through cap-and-trade, etc. We would harm ourselves as the price of admission in order to pay to upgrade the infrastructure of other nations on an unprecedented scale.

But for now, just as predicted, by signaling that he would come to Copenhagen President Obama has cornered himself such that politically he could not yet again fly off to catcalls and no achievement, telling the rest of the world that they could hold him -- meaning us -- up for billions. He would do anything for a deal, and is doing it. The framework has been erected in anticipation of his arrival.

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